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Global Market Report - 10 September

Lex Hall  |  10 Sep 2019Text size  Decrease  Increase  |  
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Australia

The Australian share market is set to edge lower in early trade, with a flat overnight performance on Wall Street providing little lead for the local bourse.

The SPI200 futures contract was down 9.0 points, or 0.14 per cent, at 6,632.0 at 8am Sydney time, suggesting an opening dip for the benchmark S&P/ASX200 on Tuesday.

The Australian share market has had a flat start to the trading week, as concerns about global growth balanced easing US-China trade tensions.

The benchmark S&P/ASX200 index closed on Monday up 0.7 points to 6,648, while the broader All Ordinaries was up 7.4 points, or 0.11 per cent, to 6,760.1 points.

The S&P 500 and Nasdaq closed slightly lower, weighed down by losses in technology shares, with the wider US market pulling back following gains last week.

The Dow Jones Industrial Index closed 0.14 per cent higher at 26,835.51 points.

The ASX had a flat start to the trading week on Monday, as concerns about global growth balanced easing US-China trade tensions.

Oil prices have risen after the new Saudi energy minister confirmed he will stick with his country's policy of limiting crude output, but copper slipped as expectations of weak demand in top consumer China were reinforced by data showing a surprise fall in its exports.

The Aussie dollar is buying 68.65 US cents, up from 68.56 US cents on Monday.

Asia

China stocks ended higher on Friday, posting their best weekly gains since late June, as Beijing vowed to further boost the economy, while Sino-US trade tensions cooled.

The blue-chip CSI300 index rose 0.6 per cent, to 3,948.51, while the Shanghai Composite Index closed up 0.5 per cent at 2,999.60.

Hong Kong stocks closed higher on Friday, posting their best week since June after the withdrawal of a controversial extradition bill and on hopes of a de-escalation in the protracted Sino-US trade dispute.

The Hang Seng index rose 0.7 per cent to 26,690.76, while the China Enterprises Index gained 0.5 per cent to 10,430.67.

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.57 per cent, while Japan’s Nikkei index closed up 0.54 per cent.

Europe

European stocks finished lower on Monday as Britain’s export-heavy FTSE index tumbled due to a stronger pound, while selling in defensive sectors such as healthcare and utilities dented early gains in markets.

After rising as much as 0.2 per cent after a surprise rise in German exports and hopes of stimulus from the European Central Bank later this week, the pan-European STOXX 600 index gave up gains as the day wore on.

The index closed down 0.3 per cent, ending a three-day run of gains, as internationally focused shares of the FTSE 100 dropped 0.6 per cent following gains for the pound on optimism that Britain will not crash out of the European Union without a deal.

However, investors were mostly looking ahead to the ECB’s policy meeting on Thursday, when the central bank is expected to introduce a new wave of monetary stimulus.

Europe’s banking index, the worst performer this year among major subsectors, rose 2.2 per cent to hit more than a one-month high.

The index has recovered from near 8-year lows hit in mid-August amid a broad recovery on hopes of a resolution to the US-China trade dispute and in the past weeks, as investors tempered expectations of aggressive easing measures from the ECB.

Banking-heavy indexes of Milan and Madrid rose about 0.2 per cent, with Santander's shares gaining 2.4 per cent after the Spanish bank said it would raise its ownership of its Mexican business to 91.65 per cent from 74.96 per cent after a stock exchange offer.

Automakers, meanwhile, jumped 2 per cent after upbeat German export data in July, while dimming chances of a no-deal Brexit helped Germany’s carmakers, whose key destination is Britain.

Also helping Frankfurt-listed shares closed 0.3 per cent higher, a report said Germany was considering the creation of a "shadow budget" that would enable Berlin to boost public investment beyond the restrictions of constitutionally enshrined debt rules, sources told Reuters.

On the other end, shares of defensive sectors including healthcare, food and beverage and utilities, which have enjoyed a strong run-up this year, fell about 1.7 per cent, weighing on the STOXX 600.

Shares in Air France slid 10 per cent to the bottom of the index after disappointing August numbers, while IAG fell 1.5 per cent as British Airways pilots began a 48-hour strike. Together, the stocks drove the travel and leisure sector down 0.5 per cent.

North America

US stocks have ended flat as increased expectations of stimulus from central banks around the world were offset by losses in technology and healthcare shares.

Investors also appeared to pull back from buying after the market posted solid increases last week, strategists said.

Microsoft was the day's biggest drag on the S&P 500 and Nasdaq.

The S&P 500 financial index was among Monday's best-performing groups, rising 1.5 per cent, with banks gaining 3.2 per cent and US Treasury yields up on rising bets of an interest rate cut at the US Federal Reserve's September meeting.

Cementing those expectations, Fed Chairman Jerome Powell said late last week the central bank would "act as appropriate" to sustain economic expansion, a phrase that financial markets have read as a sign of an impending rate cut.

Stocks rose last week largely on easing worries about US-China trade negotiations.

This week, the European Central Bank is expected to introduce new stimulus measures at its meeting on Thursday.

The Dow Jones Industrial Average rose 38.05 points, or 0.14 per cent, to 26,835.51, the S&P 500 lost 0.28 points, or 0.01 per cent, to 2978.43 and the Nasdaq Composite dropped 15.64 points, or 0.19 per cent, to 8087.44.

Earlier on Monday, US Treasury Secretary Steven Mnuchin said he did not see the threat of a recession as the Trump administration seeks to revive trade negotiations with China, adding he expected a positive year ahead for the US economy.

In healthcare, Amgen fell 2.6 per cent after analysts raised questions about data on the company's lung cancer drug, while the S&P 500 healthcare index was down 0.9 per cent. The S&P 500 technology index ended down 0.7 per cent.

Among gainers, energy stocks rose along with oil prices.

Among other stocks, AT&T gained 1.5 per cent after shareholder Elliott Management disclosed a $US3.2 billion stake in the company and pushed for changes.

Boeing fell 1.2 per cent after it suspended load testing of its new widebody 777X aircraft over the weekend as media reports said a cargo door failed in a ground stress test.

is content editor for Morningstar Australia

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